The Galveston Daily News has reported the details from the city of about 14,500 residents.

The $1 million deficit — a significant problem when it’s an amount equal to one-tenth of your budget — was revealed in the initial 2012-13 budget proposal from City Manager Carol Jo Buttler.

That plan calls for a tax increase of 8.5 cents, to about 60 cents per $100 of valuation, and Councilman James Osteen said it likely would not be enough to prevent a deficit of $500,000.

Interim Finance Director Carl Wessels conducted a thorough review of city coffers and concluded the city started last year’s budget with a $200,000 deficit. However, council members weren’t aware of this until a memo from Buttler on July 9.

These revelations could also be a key reason Buttler and Wessels are now in place as former City Manager Eric Gage resigned last year and former Budget Director Karen Cooper left in the spring.

The Daily News reported Buttler’s bad news and one council members reaction to it.

“Analysis of city of La Marque finances confirmed previous fiscal year budget began with a deficit of just (more than) $200,000. Not only were revenues underestimated compared to expenses, but also nonrecurring revenues were allocated to offset recurring expenses.”

“This is disturbing, and now there’s a proposed tax increase,” Osteen said. “I won’t go for that. We need to find areas to cut the budget.”

It gets worse.

Wessels told Osteen and Councilwoman Connie Trube La Marque’s finances had been “on a disastrous downward path” the past four years, the newspaper has reported.

Osteen said the cuts will come from city staff. That’s why Buttler is already looking at cuts by attrition, retirement incentives, and outsourcing city services, the Daily News reported.